Foxconn and Stellantis form joint venture to develop high-end automotive chips

"SiliconAuto will provide customers an auto industry-centric source of semiconductors for the growing computer-controlled features, modules, needed for EV."

Taiwan's tech giant Foxconn and US-European carmaker Stellantis announced Tuesday that they have set up a joint venture to design and sell high-end automotive chips.

Semiconductor chips are seen on a circuit board of a computer in this illustration picture. (Representative Image/Reuters File Photo)

SiliconAuto will be headquartered in the Netherlands with sales estimated to start in 2026, the firms said in a statement, without providing financial details.

"SiliconAuto will provide customers an auto industry-centric source of semiconductors for the growing number of computer-controlled features and modules, particularly those needed for electric vehicles," the statement said.

Semiconductors, which power everything from smartphones to toys to hypersonic missiles, became scarce during the coronavirus pandemic as factories shut but demand for electronics surged.

Tech companies, including Foxconn, have increasingly looked to shift manufacturing away from China after strict Covid policies, a bout of industrial unrest and ongoing diplomatic tensions with the United States hurt production. (ALSO READ: Fiat parent Stellantis eyes India for low cost manufacturing of EVs for Europe)

Stellantis, the world's third-largest automaker by revenue, said last month that the easing global shortage of semiconductor supplies helped drive sales in the first quarter.

Stellantis's electric vehicle sales jumped 22 percent year-on-year in the January-March period, and the group aims to have 47 all-electric models by the end of next year.

Foxconn -- officially Hon Hai Precision Industry -- is the world's biggest contract electronics manufacturer and a principal assembler of Apple's iPhones.

Foxconn Chief Product Officer Jerry Hsiao said the new collaborative venture with Stellantis would see "a future of extraordinary EV mobility".